June 12, 2013

AZ Technology & Innovation: Desert Silicon

Tempe-based Desert Silicon is a global supplier of materials and services used by the semiconductor industry to make integrated circuits. Desert Silicon President Tom Brown will discuss his company’s products and mission.

Ted Simons: Tonight's focus on Arizona technology and innovation looks at Desert Silicon, a Tempe-based company that supplies materials and services to the semi conductor industry for use in the development of integrated circuits and other high-tech items. Joining us is Tom Brown, president of Desert Silicon. Give me a better definition of what your company does.

Tom Brown: We make coatings for wafers. Typical devices make to different coatings, level by level by level. If we can make one of those levels a little better we can improve the efficiency, give greater yield, make things work better, give better performance.

Ted Simons: So it's either specialty coatings for these wafers.

Tom Brown: Yes.

Ted Simons: Tell us why a wafer would need a specialty coating.

Tom Brown: For example, LED lighting is a high-growth industry right now. They are looking at putting LED lights in homes and other places. If you match the refractive index of a bottom layer with a top layer, you let more light go through. So we have new technology that makes that work better. We can improve the efficiency of lighting by about 15%, a really big difference for LED lighting.

Ted Simons: This is the process -- correct me if I'm wrong -- the process is called spin-on coating. What is that?

Tom Brown: To me it's almost like magic, really, really interesting. You take a liquid in a bottle and pour it on a wafer that's spinning. It turns from a wafer to solid glass. We can make different types of glass that give different properties to these wafers.

Ted Simons: How thin a wafer and how thin of glass?

Tom Brown: Like a hundred microns or something. Much, much smaller, very, very thin layers.

Ted Simons: These will eventually be used in phones and tablets.

Tom Brown: It can be used in everything. We have companies using them to make better health care devices, companies that are making new energy conversion devices. One company wants to take the heat from a muffler and change that to electricity. So you could replace the alternator on a car for example.

Ted Simons: Interesting idea. You have stuff here with you now. What are we looking at now as far as -- now --

Tom Brown: So this is a silicon wafer. It has a thin coating on it. And sometimes you can see it a little better on the back of the wafer.

Ted Simons: That's spun on, as it were?

Tom Brown: This is put on by a more traditional method, but this is an example. We can create these same types of layers with the spin-on material.

Ted Simons: Okay. What else you got over there?

Tom Brown: A different -- same type of thing only a little different layer, because it has a different color to it. The colors vary by how thick the layers are. It's like a scale on a butterfly wing. They have different reflections depending on how thick they are. This is very similar to that.

Ted Simons: Interesting. Does your company have a factory? Does have it a lab? How are they produced? How is this spun-on coating done?

Tom Brown: For several years we worked out of my partner's garage. He has a big garage on his property and we have worked to make materials there. We have an investment from a business incubator, that really believes in conscious capitalism, creating honorable businesses in the state of Arizona. And so we work with them to -- they have funded us and given us space to work. We will get a year of free rent in one of their facilities, and we're building a laboratory to make a larger expansion where we can produce larger quantities of our chemicals.

Ted Simons: How much room would you need for this kind of expansion?

Tom Brown: Our materials are relatively expensive, a small bottle may cost a little over $1,000. We don't need a lot of space. We have may be 4,000 square feet of manufacturing space, enough to make lot of material.

Ted Simons: Let's say Ted's Tablet Company, I call you and I say, I need something to improve the performance of my tablets. You say --

Tom Brown: On our website we have a page called designer glass. So someone can call us up exactly like you said. They might say, we want to have a different refractive index to better match, or a high dialectic constant. A local company asked for high dialectic constant materials. We go to our laboratory and create and design a new material that would work better for their process.

Ted Simons: Do you work mostly with big companies, small companies?

Ted Simons: A lot of small companies where new innovations are coming, we spend a lot of time with them.

Ted Simons: As far as Arizona is concerned, you're basing this company, your space is in Tempe, correct?

Tom Brown: That's correct.

Ted Simons: Talk about Arizona and the opportunities, the high-tech opportunities we have here in the Valley and in the state as a whole.

Tom Brown: We feel like we have a really important role because a number of years ago, if you wanted to have really creative people, what you might do is have a lot of machine shops where they ground metal and made things very precise and exact. Today we live in a different environment. High-tech companies need new materials, and that's what we provide. We feel like we're an important part of the Arizona business ecosystem. We can help new companies get new innovative materials, they can have a giant step up ahead of other people because of what they are doing. We have orders this week, from India, and another country -- we have them from all over the world. But we do focus a lot over Arizona, also.

Ted Simons: And that I think helps quite a bit, I would imagine.

Tom Brown: They do. You know, no one talks about this, but having a small business at times can be kind of a lonely job. You're trying to create something new, taking it to the rest of the world. Sometimes they love you, sometimes they hate you. It's a good thing to be with others trying to do the same thing. You can encourage each other and build on each other's work.

Ted Simons: Thank you so much, sounds like you've got things going there. Good to have you here.

Tom Brown: All right, thank you very much.

Bridgestone Guayule Research Facility

The Bridgestone tire company has broken ground on a new research facility in Mesa to find better ways to produce biorubber from the Guayule plant. Shea Joachim, Economic Development Project Manager for Mesa, will talk about the plant.

Ted Simons: The Bridgestone Corporation broke ground on a new research facility in Mesa to produce bio rubber from a desert plant. Good to have you here.

Shea Joachim: Thanks for having me.

Ted Simons: Bridgestone, a tire rubber company, what are they building again?

Shea Joachim: There's actually two components to the project. There's the bio rubber research process center which we built in Mesa. Also an agricultural corporation to be built down in Eloi. It's a multimillion-dollar investment for Bridgestone to explore guayule as a source of rubber. It'll help Bridgestone meet the growing global demand for rubber, and relieve some of the reliance on the tree that's currently the primary source for rubber production today. Down in Eloi they will cultivate the plant, just like a shrub. They will ship it to Mesa, the feed stock will be used in the processing center. It'll be located on approximately 10 acres of property just a couple miles east of the Phoenix Gateway Airport. Probably most importantly it'll support 40 high-wage jobs.

Ted Simons: We're looking at the plant right here. This is the site for the research center?

Shea Joachim: That's correct.

Ted Simons: And the center should eventually look like a pretty nice high-tech operation, correct?

Shea Joachim: Over time they hope to expand. If they can improve the commercial scalability of the process they look to do a full-grown production facility.

Ted Simons: Where is the plant naturally found? It's around here somewhere?

Shea Joachim: It's all over in New Mexico, northern Mexico, and Arizona.

Ted Simons: And how does it become rubber? We're not being too technical about it.

Shea Joachim: I'm not the guy for the technical stuff. My understanding is there's a natural presence of rubber within the bark of the shrub. The process extracts that rubber from the plant and it can be used in products like shoes, tires and whatnot.

Ted Simons: And cheaper to make than synthetic rubber or more environmentally --

Shea Joachim: I think that's the challenge. If they can produce it at a price that's competitive, it'll start to relieve some of the reliance on the havea tree, the current primary source of rubber.

Shea Joachim: This is what we call the Mesa Gateway area.

Ted Simons: By the airport.

Shea Joachim: Correct.

Ted Simons: Is it under development?

Shea Joachim: We have a lot of things going on down there right now. A freeway under construction, State Route 24. Our airport is growing like gang busters.

Ted Simons: Sure, sure.

Shea Joachim: And this is just a couple miles east.

Ted Simons: Tell us about state route 24.

Shea Joachim: What's being built is really the first extension of State Route from Loop 202 to about Ellsworth road if you're familiar with the area.

Ted Simons: Going north?

Shea Joachim: Going south. It'll be right to the east side of the airport.

Ted Simons: Isn't First Solar and Fuji Film in the vicinity?

Shea Joachim: Fuji is right across the street from the location of the Bridgestone plant.

Ted Simons: How many jobs?

Shea Joachim: 40 to start. We hope to see the job growth come, as well. High-wage jobs, so above average wages and they will primarily be technicians and researchers. Those are the types of jobs we're trying to grow in Mesa, that's very much in line with our strategy which we affectionately call Mesa HEATT, health care, education, aerospace, technology and tourism.

Ted Simons: Give us some more information here as to what the goal is, and what the process has been and what you've got going so far.

Shea Joachim: Yeah. So you probably have heard about our education initiative which recently resulted in five high-quality higher learning institutions coming to Mesa. Albright College, Westminster, Wilkes University, Benedictine University, and Iowa University. They are a strategy to complement our workforce effort. We believe there are sectors within the healthcare umbrella that are really strong, the opportunity to Mesa, and we look to take advantage of that.

Ted Simons: Has it been easy to convince the Mesa folks?

Shea Joachim: I'm glad you brought that up. We are extremely fortunate to have the mayor and council we have right now. They are very forward thinking. They have set the economic strategy for us, Mesa HEATT. Some of these products, like Bridgestone, provides a certain comfort level for companies to make this investment in our community, they will not be just supported they will be celebrated in Mesa.

Ted Simons: Tell us why Bridgestone -- have they had a presence in Arizona in the past?

Shea Joachim: I'm sure there's been some retail presence. As far as a research facility, I'm not sure. Why they chose Mesa, these big investment decisions there are always a variety of factors. The guayule shrub is grown there. But also, the East Valley boasts a very deep and talented workforce. They can meet the immediate workforce needs and future human capital needs. Water, sewer, gas and electric was all at this site. Bridgestone could be starting right away and could meet the deadlines set by the company for the investment.

Ted Simons: I'm sure Mesa residents would especially want to know about incentives. Did it cost the city -- How much to get them to that location?

Shea Joachim: No tax incentives involved, there's no fee waivers involved whatsoever. It's a relatively underdeveloped portion of the city, surrounded by large industrial users. The only thing we were able to work out with Bridgestone, they asked for a temporary deferral of street improvements on Mountain Road, and the City Council supported that. That's really the only deal point we had as a project. It's a great project all around.

Ted Simons: When does the first Bunsen burner fire up out there? When does the research start?

Shea Joachim: They hope to have the facility operational by 2014 and hope to have their first rubber trial run in 2015.

Ted Simons: Sounds like fascinating stuff, a lot going on in Mesa. Thanks for joining us.

Shea Joachim: Thanks for having us.

Legislative Update

Ted Simons: Thank you. Good evening, and welcome to "Arizona Horizon," I'm Ted Simons. The Governor calls a special session of the legislature to push lawmakers into quicker action on Medicaid expansion and the budget. Here with the latest, Luige del Puerto with the "Arizona Capital Times." Luige, was this a surprise?

Luige del Puerto: It was a complete surprise. We had expected that after Speaker Andy Tobin said we're not going to meet Wednesday, we meet on Thursday, and Andy Biggs said we'll not meet on Thursday, we'll meet on Monday, we expected nothing would happen on the Medicaid expansion front on the budget this week. Lo and behold, yesterday afternoon the Governor called for a special session. The call landed in our mailbox at 5:01 p.m. That call for a special session was for 5:00 p.m. today.

Ted Simons: Now, get down there now. And this after Speaker Andy Tobin basically adjourned the House until Thursday. Why did he do that?

Luige del Puerto: There are theories that he may be trying to buy time to work on his proposal to get his budget out. He's been working to try and get Republicans to support his proposal. The other speculation is he's starting to poke the Governor's eye and maybe pulling her chain a little bit, and the governor poked back.

Ted Simons: And President Andy Biggs of the Senate adjourned until next week?

Luige del Puerto: Their plan was to meet today and adjourn until Monday. So they are not going to meet on Thursday.

Ted Simons: The Governor is tired of the delays, find out we're not going to do this until tomorrow. As of a minute ago I want you down here for a special session. Talk to me about what a special session is and how much control the Governor has, how much control the legislature has.

Luige del Puerto: It's really just like a regular session, except that they usually decide if they want to fast-track the passage of certain issues. They used to do special sessions to pass the budget. It's quicker to pass it that way and you can immediately start the time frame where the budget takes effect. It's true for other bills they have done before. You do a special session to do it. In this particular case the Governor has to proclaim special session, and specify what she wants to be included or tackled in that special session. In this case she said it would be the budget and it would be Medicaid expansion. Now, of course, the Constitution essentially requires the legislature to meet when the governor makes that request for a special session. But there's no requirement for them to do anything. The Governor can call them to a special session, they could go into a special session and sit there and not do anything.

Ted Simons: If some sat there, and some apparently did and not do anything, at least as protest for the opening night. Still, the votes are there for Medicaid expansion. So you can sit there and do nothing, but something's going to happen.

Luige del Puerto: Yes. What's really telling last night is that the House and Senate leadership did accede to the Governor's request for a special session. They were the ones, Speaker Andy Tobin and Andy Biggs are the ones that presided over the chambers. There is pressure on them. They are against Medicaid expansion. That tells you there was pressure on them to accede to the Governor's request, and at the end of the day they said, if you get the votes we'll make it happen.

Ted Simons: Basically do their jobs.

Luige del Puerto: Yes.

Ted Simons: Speaking of their jobs, there were rumors all over they might lose their jobs, in terms of leadership. How close did it come to literally a palace coup in the House similar to the Senate, and maybe one in the Senate, both leaders, Biggs and Tobin being shown the door?

Luige del Puerto: This is the first time we've heard rumors about ousting Andy Tobin. We were really surprised yesterday to hear speculation about a potential plan to oust Speaker Andy Tobin. The Governor can compel the leaders and the legislature to meet in a special session, but she cannot really force them to do anything during that special session. There was this supposed plan to go ahead, and if it came to that, replace the two leaders to ensure the Governor gets what she wants.

Ted Simons: Which you could do with a simple majority?

Luige del Puerto: It would be in the House and in the Senate. They are voting for a new Senate President and new speaker.

Ted Simons: Were there new ones lined up ready to go?

Luige del Puerto: Well, the other things that's telling is that the budget bills that were introduced yesterday were introduced by Frank Pratt in the House and Steve Pierce in the Senate. The speculation, the rumor, however you want to put it, they were prepared to go ahead and take over from Mr. Biggs and Mr. Tobin.

Ted Simons: Okay. You've got all this going on and the governor calls a special session. Some lawmakers are upset because their dinner was interrupted and these sorts of things. What was the response from Biggs and Tobin?

Luige del Puerto: It was pretty acerbic. They were not happy. That's an understatement. They basically accused her of being impetuous. Essentially hijacking the budget process and forcing them to do something and intervening in what should be a process that belongs to the House and the Senate.

Ted Simons: But certainly you would think that they would have to know by these adjournments and stretching it out and stretching it out, at some point someone's going to say enough's enough. Again, you're saying that Tobin in the House was perhaps buying time, perhaps hoping to cool some people off a little bit and maybe address it on Thursday? I guess the Governor's office said enough's enough.

Luige del Puerto: Yeah. And obviously the Governor has the votes to pass her budget and to pass Medicaid expansion and to a certain extent this has been -- played on for a number of weeks. The Governor finally decided that's it. Let's get this done.

Ted Simons: Last point on this: None of this happens if there isn't a coalition of Republicans and almost all Democrats, I guess, together working side by side, if you will, in the kind of cooperation many haven't seen in a while down there. Talk to us about the coalition. Who's involved and who's left out on the sidelines.

Luige del Puerto: This coalition of Republicans and all of the Democrats in both the House and the Senate, the Republicans are essentially the members of the so-called main extreme wing of the Republican caucus. They are viewed to be more pragmatic, less ideological about their stances on issues. We've seen this caucus essentially emerge on certain crucial votes before, on immigration for example, the immigration debate a few years ago. Some of the budget bills we've seen a few years ago. Now we are seeing them again. To a certain extent this, split within the caucus is really just being reaffirmed by what we are seeing now. Folks like John Mccommis in the Senate for example, and Mr. Pratt in the house, for example, guys that live in districts that may be called swing districts. They are considered to be, like I said, more mainstream than the rest of their caucus.

Ted Simons: One representative had an interesting quote, the most effective Democratic governor in Arizona history. They are throwing spitballs at her, they are not happy.

Luige del Puerto: Making that comment was probably being very gracious. Some of the tweets, the comments that we've seen are just really acerbic, really harsh.